It’s not the employer who pays the wages. Employers only handle the money. It’s the customer who pays the wages. –Henry Ford

These are words to live by when handling your Military Family’s finances, and especially when planning for your spouse’s Military retirement.

You might be wondering – when should my family start planning for this transition?

The answer? As early as possible! If your service member has just joined a branch of the Military, you should start preparing from day 1.  No matter how long your service member has been in, the earlier you start preparing, the better you’ll be able to position your family to make the most of the benefits that are available to you while on active-duty.  So, let’s get started.

Get out of debt

First things first. Focus your attention on getting out of debt. This should be top priority. Once you’ve broken even on your finances, you’ll be more prepared, motivated and optimistic about saving for the future.

Pay yourself first

A great goal to set for yourself is to set aside 20% of your family’s disposable income (the money your family has available after income taxes) – 10% for retirement and 10% for your emergency fund. Allotments are AAFMAA‘s recommended approach for setting aside this money. That way, you know it’s being handled responsibly and it’s also out of sight, and out of out of mind – removing that temptation to spend it!

Take advantage of the Thrift Savings Plan (TSP) which allows Military members to contribute to retirement savings and investment plans. Make the most of the money you make so that it can earn more over time.

Set aside money regularly if you plan to contribute or fully fund your child’s education. Private school, study abroad opportunities, college tuition, books, room and board, etc. Talk with your service member about your educational goals, and your children’s educational savings goals so you can make a plan and contribute to that plan regularly.

Examine your goals

Once you have saved at least 6 months of income for your emergency fund, you can start saving for new goals. When your spouse retires from the Military, do you want to invest in a boat? Want to buy an RV? Want to plan a month-long vacation to Italy to celebrate your spouse’s retirement or an upcoming wedding anniversary? Once you are prepared for an emergency, your educational fund is well on its way and your retirement funds have been contributed to regularly, your family can develop new goals to work toward and look forward to.

The more you plan, the more you’ll get out of the money earned in a Military career.

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